Price Trend

In July 2019, the domestic market for 1# lead ingots shocked, with an average price of 16106.25 yuan/ton at the beginning of the month and 16650 yuan/ton at the end of the month, an increase of 3.38%.

On July 31, the lead commodity index was 100.38, down 0.95 points from yesterday, down 25.10% from the cyclical peak of 134.01 points (2016-11-29), and up 34.50% from the lowest point of 74.63 on March 19, 2015. (Note: Period refers to 2011-09-01 to date).

II. Market Analysis

Domestic market: This month, the spot lead market overall shocks higher, in mid-July ushered in a wave of gains, mainly driven by the futures market, Lunqian eased trade tensions between China and the United States, the Federal Reserve expected to increase the probability of interest rate cuts, Pierre Port lead refinery delayed the resumption of production and other multiple good news stimulated, three consecutive daily results. The weekly increase of body length was 4.98%. Driven by this, Shanghai lead started to reach 16,450 yuan/ton on the 10th or so, reaching a new high in recent two months. Spot market was boosted and began to enter the ascending channel. However, downstream demand has not yet been liberalized. The downstream battery industry is mainly on the lookout, purchasing cautiously, and the rise in spot market is limited. On the 15th, with the expected global interest rate cut, the US dollar rose and fell. The domestic economic data for half a year showed that the economy was stable. The bull capital came into the market strongly. The basic metals were flushed red all over the line under the financial impetus. Lunqian rose continuously to US$2070/ton, with a weekly increase of 4.6% and a cumulative increase of about 9.3% in Lunqian in two weeks. Shanghai lead was driven by four consecutive Lianyang, up to 16,700 yuan/ton, a 3.5% weekly increase. The main trading range of spot lead is 16000-16575 yuan/ton, up about 500 yuan/ton. However, downstream battery companies are afraid of high-prudent mining, market turnover is poor, market confidence is inadequate, downstream manufacturers are less willing to hoard goods, mainly on-demand procurement, due to the lack of downstream support, spot lead prices are insufficient momentum to rise, downward shocks, restore the trend of shocks.

Supply and demand: According to a report released by the International Lead and Zinc Research Group (ILZSG) on July 16, global lead supply in May turned into an excess of 13,400 tons and a shortage of 30,800 tons in April. In the first five months of this year, the global lead market was short of 42,000 tons, compared with 34,000 tons in the same period last year.

According to data released by the World Bureau of Metal Statistics (WBMS) on July 17, the global lead market supply gap was 162,000 tons in January-May 2019 and 280,000 tons in the whole year of 2018. By the end of May, the total stock was 19,000 tons lower than that at the end of 2018. Unreported inventory changes are not included in consumption statistics. From January to May 2019, global refined lead production (primary and recycled) was 5.177 million tons, an increase of 9.8% over the same period last year. China’s apparent demand is estimated at 2.462 million tons, an increase of 499,000 tons over the same period last year, accounting for about 46% of the global total. Apparent demand in the United States increased by 13,000 tons from January to May 2019. In May 2019, the output of refined lead was 1023,400 tons and the consumption was 103,06,000 tons.

Domestic events:

Ministry of Industry and Information Technology: List of 7 lead-acid battery enterprises revoked by the announcement: According to “Standard Conditions for Lead-acid Battery Industry (2015 edition)” and “Management Measures for Lead-acid Battery Industry Announcement (2015 edition)”, the announcement (No. 5 in 2016, No. 38 in 2016, No. 20 in 2017) will be withdrawn from the announcement (No. 5 in 2016, No. 38 in 2016, No. 20 in 2017). The list of seven lead-acid battery enterprises sold will be announced.

Environmental protection “imperial mission” to start again! Central ecological environmental protection supervision involves central enterprises for the first time: Recently, the Ministry of Ecology and Environment issued a message that the second round of the first batch of central ecological environmental protection supervision will be launched in full in the near future. Eight central ecological environment protection supervision teams have been set up to supervise and stationed in six provinces and two central enterprises.

3. Prospects for the Future Market

The downstream battery industry continues to digest Pre-Inventory mainly, affected by high temperature, blocked plans to improve production capacity, feared high emotions, and lacked downstream support. It is expected that spot lead prices will still be mainly shocky.